Ceragon Networks Reports Fourth Quarter and Year-End 2009 Financial Results
TEL AVIV, Israel, February 1 /PRNewswire-FirstCall/ -- Ceragon Networks Ltd. (NASDAQ: CRNT and TASE: CRNT), the provider of high-capacity, LTE/4G-ready wireless backhaul networks, today reported results for the fourth quarter and year which ended December 31, 2009.
Revenues for the fourth quarter of 2009 were $53.4 million, down 6% from $56.8 million for the fourth quarter of 2008 and up 19% from $44.7 million in the third quarter of 2009.
Net income in accordance with US Generally Accepted Accounting Principles (GAAP) for the fourth quarter of 2009 was $2.1 million or $0.06 per basic and diluted share, compared to net income of $2.7 million in the fourth quarter of 2008, or $0.07 per basic share and diluted share.
On a non-GAAP basis, net income for the fourth quarter, excluding $1.3 million of equity-based compensation expenses, was $3.4 million, or $0.10 per basic share and $0.09 per diluted share. Non-GAAP net income for the fourth quarter of 2008 was $3.3 million, or $0.09 per basic and diluted share (please refer to the accompanying financial table for reconciliation of GAAP financial information to non-GAAP).
Revenues for the full year of 2009 were $184.2 million, down 15% from $217.3 million in 2008. Net income on a GAAP basis for 2009 was $3.7 million or $0.11 per basic share and $0.10 per diluted share. Net income for the year 2008 was $26.0 million or $0.70 per basic share and $0.68 per diluted share including $11.2 million of tax benefit related to the initial creation of deferred tax asset in the second quarter of 2008.
On a non-GAAP basis, net income for 2009 was $7.3 million, or $0.21 per basic share and $0.20 per diluted share. Net income for the year 2008 was $17.3 million, or $0.47 per basic share and $0.45 per diluted share.
Gross margin on a GAAP basis in the fourth quarter of 2009 was 34.0% of revenues. Gross margin on a non-GAAP basis in the fourth quarter of 2009 was 34.1% of revenues.
Cash and cash investments at the end of the quarter were $98.3 million.
"The revenue growth resumed in Q3 and accelerated in Q4," said Ira Palti, President and CEO of Ceragon. "We expect this momentum to continue during 2010, driven primarily by ongoing demand for high capacity backhaul for cellular networks. Geographically, we expect continued strength in Asia Pacific, augmented by improvement in most other regions. Increasingly, wireless carriers of all types are expecting backhaul vendors to deliver a complete network including a host of professional services. We will continue to invest, as we did in Q4, in more R&D, pre-sales, sales as well as services resources, particularly in North America, to accommodate the trend toward more turnkey projects. With continued strong focus on expense control, we expect profits to grow more rapidly than revenues, with a target of 30-35% revenue growth for 2010 over 2009."
Supplemental revenue breakouts:
Geographical breakdown, fourth quarter of 2009:
EMEA: 45%
North America: 23%
Asia Pacific: 27%
Latin America: 5%
A conference call discussing Ceragon's results for the fourth quarter of 2009, will take place today, February 1 2010, at 9:00 a.m. (ET). Investors are invited to join the Company's teleconference by calling (800) 230-1096 or international (612) 332-0226 at 8:50 a.m. EDT. The call-in lines will be available on a first-come, first-serve basis.
Investors can also listen to the call live via the Internet by accessing Ceragon Networks' website at the investors' page: http://www.ceragon.com/ir_events.asp?lang=0 selecting the webcast link, and following the registration instructions.
If you are unable to join us live, the replay numbers are: (800)-475-6701or international +1-(320)-365-3844, Access Code 140552.
A replay of both the call and the webcast will be available through March 1, 2010.
About Ceragon Networks Ltd.
Ceragon Networks Ltd. (NASDAQ and TASE: CRNT) provides high capacity, LTE/4G-ready wireless backhaul solutions that enable wireless service providers to deliver voice and premium data services, such as Internet browsing, music and video applications. Ceragon's wireless backhaul solutions use microwave technology to transfer large amounts of network traffic between base stations and the infrastructure at the core of the mobile network. Ceragon designs solutions to provide fiber-like connectivity for circuit-switched, or SONET/SDH, networks, next generation Ethernet/Internet Protocol, or IP-based, networks, and hybrid networks that combine circuit-switched and IP-based networks. Ceragon's solutions support all wireless access technologies, including GSM, CDMA, EV-DO and WiMAX. These solutions address wireless service providers' need to cost-effectively build-out and scale their infrastructure to meet the increasing demands placed on their networks by growing numbers of subscribers and the increasing demand for premium data services. Ceragon also provides its solutions to businesses and public institutions that operate their own private communications networks. Ceragon's solutions are deployed by more than 150 service providers of all sizes, as well as in hundreds of private networks, in nearly 100 countries. More information is available at http://www.ceragon.com
Ceragon Networks(R), CeraView(R), FibeAir(R) the FibeAir(R) design mark and Native2 are registered trademarks of Ceragon Network s Ltd., and Ceragon(TM), PolyView(TM), ConfigAir(TM), CeraMon(TM), EtherAir(TM), QuickAir(TM), QuickAir Partner Program(TM), QuickAir Partner Certification Program(TM), QuickAir Partner Zone(TM), EncryptAir(TM) and Microwave Fiber(TM) are trademarks of Ceragon Networks Ltd.
This press release may contain statements concerning Ceragon's future prospects that are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and projections that involve a number of risks and uncertainties. There can be no assurance that future results will be achieved, and actual results could differ materially from forecasts and estimates. These are important factors that could cause actual results to differ materially from forecasts and estimates. These risks and uncertainties, as well as others, are discussed in greater detail in Ceragon's Annual Report on Form 20-F and Ceragon's other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date on which they are made and Ceragon undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made.
Ceragon Reports Fourth Quarter 2009 Results
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended Year ended
December 31, December 31,
2009 2008 2009 2008
Revenues $ 53,357 $ 56,779 $ 184,220 $ 217,278
Cost of revenues 35,231 37,802 123,494 144,607
Gross profit 18,126 18,977 60,726 72,671
Operating expenses:
Research and development 5,812 5,195 20,189 20,310
Selling and marketing 7,877 8,989 29,996 32,252
General and
administrative 2,244 2,160 7,893 7,150
Total operating
expenses $ 15,933 $ 16,344 $ 58,078 $ 59,712
Operating profit 2,193 2,633 2,648 12,959
Financial income, net 228 69 1,496 2,184
Income before taxes 2,421 2,702 4,144 15,143
Tax benefit (taxes
on income) (293) 36 (489) 10,834
Net Income $ 2,128 $ 2,738 $ 3,655 $ 25,977
Basic net earnings
per share $ 0.06 $ 0.07 $ 0.11 $ 0.70
Diluted net earnings
per share $ 0.06 $ 0.07 $ 0.10 $ 0.68
Weighted average
number of shares
used in computing
basic net earnings
per share 34,256,957 36,517,147 34,369,212 36,863,684
Weighted average
number of shares
used in computing
diluted net earnings
per share 36,365,610 36,938,654 35,796,878 38,338,584
(more)
Ceragon Reports Fourth Quarter 2009 Results
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
(Unaudited)
December 31, December
2009 31, 2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 38,339 $ 28,224
Short-term bank deposits 30,183 35,044
Marketable securities 16,724 2,187
Trade receivables, net 68,452 70,811
Deferred taxes 3,462 4,082
Other accounts receivable and prepaid expenses 7,492 10,094
Inventories 65,925 40,510
Total current assets $ 230,577 $ 190,952
LONG-TERM INVESTMENTS:
Long-term bank deposits 10,824 8,204
Long-term marketable securities 2,250 24,102
Severance pay funds 4,971 4,065
Deferred taxes 8,942 8,007
Total long-term investments $ 26,987 $ 44,378
PROPERTY AND EQUIPMENT, NET 11,809 8,891
Total assets $ 269,373 $ 244,221
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables 52,898 40,731
Deferred revenues 18,548 5,886
Other accounts payable and accrued expenses 9,847 8,041
Total current liabilities $ 81,293 $ 54,658
LONG-TERM LIABILITIES
Accrued severance pay $ 7,174 $ 6,647
SHAREHOLDERS' EQUITY:
Share capital:
Ordinary shares 92 91
Additional paid-in capital 291,736 285,141
Treasury shares at cost (20,091) (7,923)
Other comprehensive income 100 193
Accumulated deficits (90,931) (94,586)
Total shareholders' equity $ 180,906 $ 182,916
Total liabilities and shareholders' equity $ 269,373 $ 244,221
Ceragon Reports Fourth Quarter 2009 Results
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(U.S. dollars, in thousands)
(Unaudited)
Three months ended Year ended
December 31, December 31,
2009 2008 2009 2008
Cash flow from operating activities:
Net income $ 2,128 $ 2,738 $ 3,655 $ 25,977
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation 960 685 3,283 2,070
Stock-based compensation
expense 1,317 594 3,607 2,557
Decrease (increase) in trade and
other receivables, net (9,751) (9,792) 4,724 (33,411)
Decrease (increase) in
inventory (15,755) 2,299 (25,415) (394)
Increase (decrease) in trade
payables and accrued
liabilities 18,932 (1,150) 14,619 8,116
Increase (decrease) in
deferred revenues 4,565 257 12,662 (816)
Increase in deferred tax asset (281) (241) (281) (11,353)
Decrease in long term payable - - - (4,650)
Other adjustments 374 108 (42) 360
Net cash provided by (used in)
operating activities $ 2,489 $ (4,502) $ 16,812 $ (11,544)
Cash flow from investing activities:
Purchase of property and
equipment, net (1,640) (1,956) (6,737) (5,029)
Investment in short and
long-term bank deposit (16,214) (13,124) (44,009) (66,267)
Proceeds from short and
long-term bank deposits 19,284 13,542 46,177 61,376
Investment in held-to-maturity
marketable securities (3,203) - (4,703) (14,851)
Proceeds from maturities of
held-to-maturity marketable
securities - 7,450 11,754 13,500
Net cash provided by (used in)
investing activities $ (1,773) $ 5,912 $ 2,482 $ (11,271)
Cash flow from financing activities:
Proceeds from exercise of
options 2,205 104 2,989 695
Purchase of treasury shares at
cost (4,128) (7,923) (12,168) (7,923)
Issuance costs - (11) - (383)
Net cash used in financing
activities $ (1,923) $ (7,830) $ (9,179) $ (7,611)
Increase (decrease) in cash
and cash equivalents $ (1,207) $ (6,420) $ 10,115 $ (30,426)
Cash and cash equivalents at
the beginning of the period 39,546 34,644 28,224 58,650
Cash and cash equivalents at
the end of the period $ 38,339 $ 28,224 $ 38,339 $ 28,224
Ceragon Reports Fourth Quarter 2009 Results
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Three months ended December 31,
2009 2008
GAAP (as Adjustments Non-GAAP Non-GAAP
reported) (*)
Revenues $ 53,357 $ 53,357 $ 56,779
Cost of revenues 35,231 70 35,161 37,749
Gross profit 18,126 18,196 19,030
Operating expenses:
Research and development 5,812 170 5,642 5,068
Selling and marketing 7,877 316 7,561 8,752
General and administrative 2,244 761 1,483 1,983
Total operating expenses $ 15,933 $ 14,686 $ 15,803
Operating profit 2,193 3,510 3,227
Financial income, net 228 228 69
Income before taxes 2,421 3,738 3,296
Tax benefit (taxes on income) (293) (293) 36
Net income $ 2,128 $ 3,445 $ 3,332
Basic net earnings per share $ 0.06 $ 0.10 $ 0.09
Diluted net earnings per
share $ 0.06 $ 0.09 $ 0.09
Weighted average number of
shares used in computing
basic net earnings per
share 34,256,957 34,256,957 36,517,147
Weighted average number of
shares used in computing
diluted net earnings per
share 36,365,610 36,365,610 36,938,654
Total adjustments 1,317
(*) Adjustments related to
equity based compensation
expenses according to SFAS
123 (R)
Ceragon Reports Fourth Quarter 2009 Results
RECONCILIATION OF NON-GAAP FINANCIAL RESULTS
(U.S. dollars in thousands, except share and per share data)
(Unaudited)
Year ended December 31,
2009 2008
GAAP (as Adjustments Non-GAAP Non-GAAP
reported) (*)
Revenues $ 184,220 $ 184,220 $217,278
Cost of revenues 123,494 256 123,238 144,350
Gross profit 60,726 60,982 72,928
Operating expenses:
Research and development 20,189 643 19,546 19,724
Selling and marketing 29,996 1,185 28,811 31,245
General and administrative 7,893 1,523 6,370 6,443
Total operating expenses $ 58,078 $ 54,727 $ 57,412
Operating profit 2,648 6,255 15,516
Financial income, net 1,496 1,496 2,184
Income before taxes 4,144 7,751 17,700
Taxes on income 489 489 373
Net income $ 3,655 $ 7,262 $ 17,327
Basic net earnings per
share $ 0.11 $ 0.21 $ 0.47
Diluted net earnings per
share $ 0.10 $ 0.20 $ 0.45
Weighted average number of
shares used in computing
basic net earnings per
share 34,369,212 34,369,212 36,863,684
Weighted average number of
shares used in computing
diluted net earnings per
share 35,796,878 35,796,878 38,338,584
Total adjustments 3,607
(*) Adjustments related to
equity based compensation
expenses according to SFAS 123 (R)
Ceragon Reports Fourth Quarter 2009 Results
Contact: Yoel Knoll
Director of Investor Relations
Ceragon Networks Ltd.
Cell (Int'l): +972-(0)52-830-6419
Office (Int'l): +972-(0)3-766-6419
[email protected]
SOURCE Ceragon Networks Ltd
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